Probe into Scots ferry fiasco costs rising up to £40m in three months

But it is felt by some that the money tap is not expected to be turned off in an attempt to get the lifeline ferries Glen Sannox and Glen Rosa sailing and keep the nationalised shipbuilder Ferguson Marine running.

It is estimated the cost of the vessels has now risen to nearly £400m.

The sum, which does not include the millions pumped into nationalised Ferguson Marine to keep it operating, amounts to over four times the £97m contract cost for the two lifeline ferries still awaiting delivery in the Inverclyde shipyard.

David Tydeman, the chief executive of Ferguson Marine indicated that it will cost an extra £240 million to build Glen Sannox and Glen Rosa on top of what was spent before nationalisation.

Some £83.25 million was spent on the ferries prior to Scottish Government taking control of the shipyard firm with a further £45m loaned.

According to Ferguson Marine updates there has been an extra £17m in costs for both vessels since the last calculation at the end of June with the cost of completion rising from £223m to £240m.

Contingency costs estimated at £30m now for both vessels could increase the overall spend even further. In June the same costs were put at around £7.5m.

READ MORE: 'Ferry fiasco'? 'Ageing fleet'? How did we get here?

There is a potential extra spend on warranties, many of which have expired.

Edward Mountain, convener of Holyroods net zero, energy and transport committee, that been investigating the future of ferries, said: "What is the point of due diligence if they are going to spend the money no matter what the costs."

The Scottish Conservative Highlands and Islands MSP, the former convenor of the rural economy and connectivity committee whose probe into the construction of the ferries for ferry operator CalMac branded the management process a "catastrophic failure" added: "I don't understand what it proves."

In May, ministers were accused by critics of presiding over an “outrageous mismanagement of public funds” after pressing ahead with the second ferry at the Ferguson shipyard, Glen Rosa despite learning it would be cheaper to scrap the vessel and tender for a new one.

That came after an eight-month long due diligence exercise which resulted in a further £72m being pumped into the shipyard in this financial year. Ministers sanctioned a cash injection of a further £61m in the last financial year as Ferguson Marine attempted to deliver the ferries.

Wellbeing economy, fair work and energy secretary Neil Gray issued a rarely-used ministerial direction in May to overrule the value for money financial test saying completing the vessel at the nationalised yard was the fastest way of delivering more ferry capacity. Without that, he said, the yard would have been put "in jeopardy".

Ministers at that point did not rule out needing to pump even more millions into Ferguson Marine to deal with the crisis warning that "inflationary and other significant pressures, such as design gaps and deficiencies" could further increase the cost to complete.

It then emerged further costs were expected because evacuation routes on the vessels had to be altered to satisfy the Maritime and Coastguard Agency (MCA), which is responsible for implementing British and international maritime law and safety policy.

Mr Gray, in mid-September after issues with the MCA became known said that he had "needed to consider any additional cost overrun, and continue to do so, along with the wider elements that I have a responsibility to consider, such as the local economy and the island communities having the ferries as quickly as possible. I suspect that I would still have given ministerial authority, given what we know now".

Glen Sannox was due in March 2024 but there remain doubts over whether that schedule will be met with Mr Tydeman saying it will "depend on how well the trial progress".

It is believed Glen Rosa is now not due to be completed until May 2025.

After a summer update, CalMac had expected Glen Sannox to be handed over in December 2023, and Glen Rosa in December 2024. They say that once handed over there will be a two month period where they will carry out crew familiarisation and network trials.

This makes Glen Sannox over six years late as it was originally due at the end of 2017, whilst Glen Rosa will be more than seven years late as Transport Scotland originally said it would be delivered ‘some months after’ the first vessel.

Mr Gray said that the latest further costs and delay were "extremely disappointing" .

He added: "My officials meet weekly with the senior management of FMPG and we continue to impress upon them the need to do everything possible to minimise costs and ensure that MV Glen Sannox is available to enter service this summer. In all of our engagement with [Ferguson Marine], we make clear the vital importance of delivering two high quality vessels to our island communities and our commitment to supporting the yard to bring them into service."

Mr Tydeman blamed half of the large increase from the original budget on what happened before nationalisation of Ferguson Marine in 2019 and in the first year after the Scottish Government took charge.

He said some of the delays and extra costs on wrong decision taken before nationalisation through an "unconventional build strategy, embedding significant design challenges, gaps and errors".

He also said decisions taken after nationalisation in 2020, before he took the helm of Ferguson Marine were partly to blame.

These included changing the contractors for the overall ship-wide operating systems, tasking new designers with "an impossible timeline".

He also said the original £97m original contract prices was "understated" and that inflation issues have become a "significant factor".

Mr Tydeman issued an apology over financial assessments set out in his June letter which failed to include £10m of work in progress in May and June, 2023.

Scottish Conservative shadow transport minister Graham Simpson MSP, said: “The SNP’s shambolic handling of building these two new lifeline ferries means taxpayers money is continuing to be wasted on an astonishing scale.

“Serious questions must be asked as to why these costs were not included by David Tydeman when he updated the committee only three months ago. Since then costs have spiralled by a further £10 million, bringing the total cost for the two ferries to £368.5 million and counting.

“Added to that, the yard faces a very uncertain future as we don’t know if the government is prepared to invest any more money into it. We need an answer to that quickly.

“These ferries must be delivered without any further delay and with costs to the public purse kept to an absolute minimum. Then Humza Yousaf must stop ducking responsibility and agree to a full independent inquiry into this shameful waste of money.”

It comes after concerns were raised that regulatory clearances for two ferries at the centre of Scotland's ferry fiasco were not made in good time - after it emerged they failed to comply with safety rules that are seven years old.

Safety clearances for Glen Sannox and Glen Rosa were rejected on June 1, sparking a redesign.

Among the issues to be resolved surrounds the installation of the evacuation routes on Glen Sannox and Hull 802 in order to satisfy the Maritime and Coastguard Agency (MCA), which is responsible for implementing British and international maritime law and safety policy.

It emerged that according to MCA, Ferguson Marine approached the safety body about the escape routes on April 11, 2023 and the plan was rejected sparking a redesign.

The issues related to 2016 cargo ship rules and linked to the International Convention for the Safety of Life at Sea (SOLAS) which states the requirements for means of escape.

David Tydeman, chief executive of nationalised Ferguson Marine has said that the issues had been the result of the MCA reassessing cargo ship rules.

The MCA in answer to a question about whether there were any rule changes said there had not been any. But they said there had been an "interpretation" of what was required and indicated that that could already be seen in other CalMac vessels.

It said that the issues came as part of an approval process during the build, where they identify areas of non-compliance. It is then for the designer or builder to then decide how to address the matters.